APARTMENT owners will be given greater powers to fight overcrowding and ''hot-bedding'' in their blocks under new strata laws to be introduced by the state government.

Owners' groups will be able to set a maximum headcount in flats based on floor space or the number of bedrooms, it is understood. A limit of two adults per bedroom, except in special cases, is likely.

The government has conceded it is ''not uncommon'' to find six to eight people living in apartments in the inner city and in university districts. Hot-bedding, where occupants use the same beds in rotating shifts, has become increasingly common in those areas, as revealed by a Fairfax Media investigation last year.

The Bankstown unit block where a young woman jumped to her death as the building went up in flames contained at least 12 homes with unauthorised renovations to cram in more occupants.

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The City of Sydney introduced a condition for new apartments in 2006 that limit the number of adult occupants per bedroom to two, but to date there has been no court action by the council to enforce the cap. Under the new state laws, owners' corporations would be able to enforce the limits they set - which is difficult under NSW's 50-year-old strata laws - through measures including fines on recalcitrant owners.

In South Australia and Western Australia, owners' corporations can impose fines of up to $500 on owners breaching bylaws on overcrowding, parking, pets, noise and unpaid levies.

But in NSW, an owner must be pursued through the Consumer, Trader and Tenancy Tribunal, and fines are paid to Fair Trading rather than going to the owners' corporation.

Last year, the number of owners seeking a penalty through the tribunal averaged just three cases a week, despite the government's green paper into strata law changes conceding there would be substantially more bylaw breaches occurring than the figures reflect.

''Many schemes would have multiple bylaw breaches happening everyday, with people parking in the wrong place, hanging washing on the balcony, keeping pets without approval or making too much noise, etc. Some stakeholders see the current system as time consuming, costly, ineffective and unenforceable,'' the review found.

New strata laws are due to be introduced to Parliament in the second half of the year on the completion of a review launched by the NSW Fair Trading Minister, Anthony Roberts, in December 2011.

Mr Roberts described the new regulations as a ''knock down and rebuild job'', saying the 1800 submissions to the review had overwhelmingly called for greater empowerment for the 70,000-odd bodies corporate in NSW. ''People are fed up with not being able to police their own bylaws … self-determination for owners' corporations is the way things are heading,'' he said.

The green paper acknowledged the difficulty in monitoring or enforcing rules around overcrowding as some people may claim to be visitors or short-term guests.

''A law like this may also indirectly discriminate against large families and those from different cultural or ethnic backgrounds,'' it said.

The chief executive of the Real Estate Institute of NSW, Tim McKibbin, said landlords had traditionally determined the number of tenants inside their properties but they would also have to accept the ''democracy'' that came along with strata and community schemes.

The government is also likely to ban property developers from appointing themselves as the caretaker company for a strata scheme.

Meriton is under fire from residents in its flagship World Square development for allowing building defects and maintenance issues to mount. Meriton awarded itself the caretaker contract - worth $2.13 million a year - for 10 years after it completed the development in 2004.

The owners have accused Meriton of issuing 9500 swipe cards to enter the building between 2004 and 2011 even though there are just 236 residential units in its World Tower.